Like in many professions and occupations there are honest and ethical people and there are some who arent. Since the commissions of the Real Estate Agent are being paid by the seller of the house a buyer cannot relay on his objectivity or impartial conduct, exactly as since without a buyer there is no deal, the seller can expect the agent to exert pressure to lower the selling price.
In short, the agents main interest is to make sure that there would be a sale, so he would be able to get his commission, therefore he would do anything in his power to make the buyer pay more than he wanted and on the other hand (the good hand :-), push the seller to settle for less than he hoped to be paid for his property.
In general it make sense to bring both sides to agree on realistic price that can cut a deal, what we would concentrate here though, is the unethical dirty tricks and manipulations some of the Real Estate agents are using in order to achieve it.
Misconduct of Agents to Seller
The sellers are the biggest losers from the real estate agents tricks
- Home owners are often duped into paying money to agents before their homes are sold. If their home does not sell, or it sells for less than the consumer was led to believe, this money, which often amounts to thousands of dollars, is lost.
- The main purpose of advertising is NOT to sell homes, but to raise the profile of agents, this is at the direct expense of home sellers.
- The payment of kickbacks from newspapers to agents can be as high as forty percent. This rebate or credit is rarely passed on to the home seller. It is kept by the agent.
- Home Owners lose millions through having their homes undersold at auctions. Home sellers are being convinced by a rational that the price goes up at auctions. But the reason the price goes up at auction is because it starts at a very low price. The truth is that auctions get lower prices more often than they get higher prices. Among agents, an auction is considered the fastest and best conditioning method.
- False and misleading offers, Many agents submit offers to sellers which are lower than the offer actually made by the buyers. This is done to make the genuine offer look good when it is revealed later. It is a common deceit. At other times, home sellers are given totally fictitious offers in order to convince them to lower prices.
- Home sellers lose a lot of money when agents use 'bait' prices to attract buyers. Agents indicate to homebuyers that homes may sell for a low price when they know very well that the home sellers would never want such prices. Agents say this is designed to attract buyers who can then be talked up in price. This ploy backfires on home sellers because it attracts many buyers who can only afford the low price. The agents then say to the sellers that "this is the most the buyers will pay." The truth is that the wrong buyers have been attracted.
- Open Inspections, Almost anyone can walk through a family home without identification. This reckless disregard for the personal safety of home-owners is a serious ethical concern. Also, the more 'lookers' who can be attracted to an open inspection the easier it is to persuade the owner to reduce the price. Agents will say that there has been "lots of activity" and, if no one has bought, the price must be lowered. But agents do not say that the people who looked were not qualified buyers.
- Betrayal of Confidence, Many agents are quick to betray the confidence of home sellers. If the home seller is ill or going through a divorce or has financial problems, this highly sensitive information is often given to buyers. One real estate trainer openly boasts that he "loves divorces" and encourages agents to exploit this emotional trauma. The personal details of home sellers should never be revealed. Home owners are advised here to keep their personal problems to themselves or in other words take the fifth amendment.
How Real Estate Agents Manipulate Buyers
- Untruths, They deliberately telling lies about the likely selling price of a property causes enormous emotional stress to homebuyers. Buyers are often given false hope about the price a home may sell for. They get their hearts set on homes which they have little or no chance of affording. Buyers are often used as pawns to persuade owners to reduce prices.
- Apathy, The treatment given to many homebuyers is often flippant. Many buyers are stunned at the almost complete lack of interest shown by real estate agents when they make an enquiry.
- Showing Setup Properties, The agent begins the tour by showing to the potential buyer few run-down houses, in contrast to these first impressions even the medium quality homes he shows him later on looks pretty nice. This trick is based on a well known psychological principle of Relative Perceptual Contrast.
- Reveal Information,By law the seller's real estate agent has a fiduciary responsibility to the seller, and they WILL tell the seller everything you say, so pretend you are under police interrogation. The first thing the agent will do is asking you how high you are willing to go on the house. Don't fall for this trick. Just give them the price you want to pay for the house minus 6% - 7% and if they ask how high you are willing to go, tell them that's it.
- Needless expenses, when buyers are told that a home is within their price range, they often spend hundreds of dollars to obtain legal searches and building inspections. Later, when they discover that the home was never within their price range, they become emotionally upset and are often furious at having wasted money needlessly.
- Auctions, Buyers are often lured to auctions in the same way that sellers are lured by deliberate misrepresentation of the price Buyers are told that the price will be low. Sellers are told that the price will be high. Great pressure is then applied to both sides at the auction. The sellers are pressured to reduce their price and buyers are pressured to pay more than they can afford.
- Buyers are often led to believe they have bought a home, only to be told later that someone else has paid a higher price for it.
- Investment Advice - The statements made to buyers about the investment potential of real estate are often misleading. Some agents tell blatant untruths about the potential of real estate. For many agents, it is always the "right time to buy". |
